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Report: Job Benefits Burden to Fall on Workers

From greater expectations of employee responsibility and self-financing to an increase in pension alternatives, a new report predicts changes in U.S. worker benefits in 2007.

2007 will bring greater expectations of responsibility and self-financing of benefits for U.S. workers, according to a report issued Dec. 28 by Watson Wyatt Worldwide, a Washington-based global consulting firm.

Among the health care benefit trends predicted in the report is an increased focus on HDHPs (high-deductible health care plans) coupled with reimbursement arrangements such as a health savings account.

One-third of the large employers surveyed in the report said they planned to incorporate HDHPs into their 2007 packages, although few appeared to replacing their current plans entirely with HDHPs.

More benefits information and tools will be online in 2007, the report predicts, as Web-based systems allow employees to model the best choices for them, such as picking the best provider by reviewing online report cards grading quality of care.

Employers are expected to loosen their requirements that employees use generic drugs whenever possible in 2007, as more popular prescription drugs come off patent and their prices are reduced.

The report asserts that there will be growth in the number of on-site clinics in the workplace that provide easy access to health care.

"The move to consumer-oriented health care programs will continue, and it will evolve to include more than just high-deductible health plans and health savings accounts," said Ted Nussbaum, director of group and health care consulting at Watson Wyatt, in a statement.

"Employers will take these efforts to the next level by targeting strategies at specific segments of health care users and using data on provider quality to help employees effectively control health care costs."

Predictions of trends in 2007 retirement plans include an increase in companies taking another look at cash-balance plans and other hybrid models as the PPA (Pension Protection Act) and new pension accounting rules are implemented.

More companies are also expected to consider alternatives to pensions such as private equity, hedge funds, infrastructure and real estate, in reviewing their investment strategies.

"Theres good news for pensions as the number of pension plan freezes slows and funding continues to improve," said Alan Glickstein, senior retirement consultant at Watson Wyatt.

"After years of regulatory uncertainty and high volatility, plan sponsors are once again offering their employees a much more predictable future. And with the new plan design and investment options available, we can expect employers to continue assessing how to best match their plans with the companys long-term goals."

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